As the gap between the rich and poor gets wider and wider, it would not be a surprise to learn that more and more people are feeling the financial pinch. One way to improve this situation is to take the wheel and start driving your career.
If you want to increase your salary, then learn to Stay, Go and Switch.
If you feel like you should or could be earning more salary, then you need to master the three key career decisions (i.e. Stay, Go and Switch). Only when you can put these decisions to use, will you truly be able to improve your situation and increase how much salary you earn. In fact, some reports suggest that employees who stay in a job for two years or longer earn 50% less than those who move1. Also factor in that, the fastest route to the CEO role is actually through a variety of role changes and challenges2, and you have a pretty convincing argument for getting to grips with the three decisions.
How do I know that these three decisions are so critical? Well because I have used them to increase my own salary. In fact, my earnings have increased by 700% since I started my career. What has helped me, is actively staying in roles and learning, going when I need a new challenge or better opportunity and then switching careers to unleash a whole new realm of possibility. But the three decisions themselves are just the framework for achieving an increased salary. What you also need is an appreciation for the factors which impact how much you earn.
Understand the main factors that decide how much you get paid
In all, there are seven main factors which help determine how much salary and compensation you receive. Each one has a varying degree of impact depending on your situation at the time. So without further ado, here are the seven factors (remember to check out our Facebook page for additional insight):
- Bias in the System – there are many forms of bias that impact how much people earn. Managing to find a situation where you are somewhat free from these will help. Obviously, depending on bias itself, this can be easier said than done. For example where diversity is the concern, then there are better employers at recognizing and hiring for diversity than others (in fact several organizations give out awards to employers who excel at inclusion and diversity). In terms of pay equality, check out Payscale’s pay and living expenses calculator, which can tell you if you are being paid fairly based on your race and gender. Fortunately, in the USA, states are moving to ban prospective employers from asking about current salary, which will hopefully help reduce the impact of bias.
- Macroeconomic Trends – simply put, whenever the economy is doing well (like recently in the USA), then employers tend to be doing well, so they expand and ultimately hire more. When employers hire more, then competition for talent increases as there tends to be a skills gap and a ‘war for talent’. This is obviously good for people changing or switching jobs.
- Perceived Value of Product or Service – the product or service your employer sells has a perceived market value, both to them as an employer and their clients/customers. For example finance jobs tend to pay more than teaching jobs. Whilst true, I am not sure what this says about our society at large.
- Supply and Demand – the supply and demand for your particular skill set and experience will play a role in determining how much salary and compensation you receive. The lower the supply, but higher the demand the more you should expect relative to the average. And the higher the supply, and lower the demand, the less you should expect relative to the average.
- Employers Place in the Market – it is common sense that larger, global companies often compensate more than smaller mom and pop setups. There are exceptions of course, but largely this holds true.
- Geography – being in a place with a strong vibrant economy can help bump up your salary, compared to geographies with a less vibrant economy and populous. For example, you tend to get paid more living in and around big cities than you would in rural areas.
- Decisions You Make – this is perhaps the biggest impact on how much you earn. With the three decisions, stay, go and switch, you have the tools to increase your salary and compensation.
So when it comes to career planning and decision time, make sure you are taking account of all seven factors in your decision. Most important of all, truly take the wheel and drive your own career.
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